As the IPO pipeline begins to wake up after a seemingly eternal slumber, venture capital-backed companies seem to be enjoying the benefits of a positive investment attitude.
Last week alone, three VC-backed companies found their way to the public market. First up was Unilab Corp. (NNM:ULAB), which raised $107.2 million its first day of trading last Tuesday. The Tarzana, Calif.-based clinical testing company priced 6.7 million shares at $16, opened trading at $21.50. Unilab closed at $23.00, a 43.75% pop from its offering price. Salomon Smith Barney was the lead manager for Unilab?s IPO.
Also hitting the market last week was Torch Offshore Inc. (NNM:TORC), which raised $80 million on June 7. The Gretna, La.-based oil exploration company priced five million shares at $16. It opened at $18.10 and closed trading yesterday at $16.67, a meager 4.1% one-day jump. UBS Warburg led the deal.
The glut of energy companies in the market and the change in power in the Senate might have had an effect on Torch?s performance.
“A number of the energy companies? are well off their highs where they have been just a couple weeks ago,” said Tom Frangione, portfolio manager at Metamarkets.com. “As more companies have come public, the names have expanded.” He added that because Torch is a drilling company, as opposed to a coal or oil distributor, that may have been a factor in its lackluster opening.
Wednesday afternoon, United Surgical Partners International (NNM:USPI), a Dallas-based surgery center operator priced nine million shares at $14 , raising $126 million. The deal was lead managed by Credit Suisse First Boston.
Frangione said that the United offering was oversubscribed and that he bought into the deal based on Unilab?s performance.
“They?re in a really good space,” he said. “The health-care industry is an outsourcing alternative to hospitals who want to save their operating rooms for high margin business such as heart transplants, but still get that sort of business by sharing it with some of these outsourced hospitals, [at] a little lower margin but still profitable. So we expect this company to do well as well.”
Before last week, 17 VC-backed companies went public this year, raising approximately $1.6 billion, according to our